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"If you're going to panic, do it fast and beat the crowd." ~ Jesse Livermore

Tuesday, August 2, 2011

U.S. squanders historic chance to fix fiscal crisis

Analysis: U.S. squanders historic chance to fix fiscal crisis
Reuters... the root causes of America's real fiscal crisis. The extraordinary chance America's leaders had to forge a "grand bargain" to rein in the country's exploding debt, with the threat of default a powerful incentive to succeed, has been squandered. ...

Low Bank Capital Is Next US Financial Crisis: Simon Johnson
Bloomberg
To appreciate the magnitude of this disaster in the US, compare the CBO's baseline forecasts immediately before and after the financial crisis. In January 2008, before anyone thought the crisis would spin out of control, the CBO projected that total ...

Deal or no deal. Economy still stinks.
CNN
There's little chance that the 10 year yield will fall that low in the US -- or even to the financial crisisbottom of just above 2% from December 2008 for that matter. Experts said the economy would really need to fall into another recession for rates ...

Commodity currencies and yuan increasingly favoured over US dollar
Channel News Asia
By Linette Lim | Posted: 01 August 2011 2334 hrs SINGAPORE: According to the IMF, the USdollar's share of global foreign exchange reserves has fallen to 60 per cent from 70 per cent a decade ago. While traditional alternatives to the US dollar have ...

A self-inflicted financial crisis
Equitymaster.com
It would be the first time that a country has created a financial crisis for itself and the rest of the world for no real reason. While countries like Greece and Ireland are doing everything they can to avoid default, the US is close to willingly ...

European Taxpayers on the Hook
Forbes (blog)
It is partially backed by the IMF, which has committed more than 40 percent of its lending facility to propping up the euro. Of course, the sensible action, as advocated by German Chancellor Angela Merkel, would have been to make investors take big ...

Watching for Contagion: A Walk Through the European Banks
Seeking Alpha
Of course, this story is already played out with Greece now effectively in default. National Bank of Greece's (NBG) stock price is well below early 2009 lows. No surprises here either. Although not as dire as in Greece, the picture is still deeply ...

Deal or no deal, a US downgrade is deserved
Financial Times
In particular, unfinished business lingers from the financial crisis of 2007-09, mostly related to bad mortgages. Those are troubling for those institutions that hold the debt, as well as being a considerable burden for the one in five mortgage owners ...

EURO GOVT-Bunds resume gains as focus turns to weak data
Reuters
The two countries have been under increased pressure in recent weeks as markets feel the size of the euro zone's EFSF bailout fund is too small to protect large fringe economies if contagion from the Greek crisis cannot be stopped. ...

US dollar faces challenges to reserve currency status
TODAYonline
SINGAPORE - The US dollar's status as the world's reserve currency could diminish as it faces off challengers from triple-A rated commodity currencies such as the Australian dollar and the Chinese yuan. According to the IMF, the US dollar's share of ...

Deal or No Deal? Obama Trumpets Debt-Ceiling 'Compromise'
Sunshine State News
Rubio declared that the current fiscal crisis "is not a complicated one to understand." “The United States spends about $300 billion a month. It has $180 billion a month that comes to the federal government through taxes and other sources of revenue. ...

S&P, Moody's Await Debt Plan Details
Fox Business
The US avoided a fiscal crisis with an eleventh hour debt ceiling deal, and the markets are recovering from its fainting spell that the US might default for the first time in the nation's history. But the credit ratings agencies are waiting on the ...

US debt deal done
ABC Online
ELEANOR HALL: To the news of a deal to avert the financial crisis in the United States. With just two days left before the US federal borrowing limit expires, congressional leaders this morning reached a deal to lift the US debt ceiling. ...

Default would reignite debate about dollar's global role
Financial Times
Experts have long been waiting for the dollar to collapse on account of mounting US external and internal imbalances. Remember how the last financial crisis was supposed to be triggered by a disorderly unwinding of global imbalances and a catastrophic ...

Do We Face A Government Default, Or De-End?
Forbes (blog)
It wouldn't be long after tax rates increased before a fiscal sinkhole opened in the hollowed-out US economy and swallowed the welfare state whole. At that point, we won't be talking about default; it will be de-end.

Dollar rises against yen after US debt deal
Focus News
“The second financial crisis is already a fact. The crisis starts when it becomes obvious that there is a problem and that the situation is not stable. In this case, it is not stable that the US is amassing such a huge deficit and is increasing its ...

Four Ways the Economy Could Grow -- or Shrink
Wall Street Journal
The economy's weakened trajectory also makes shocks, such as the European financial crisis and wrangling in Washington over the debt, all the more threatening. This year, the four key GDP components—consumption, investment, government and trade—have ...

US leaders reach debt deal - Congress vote to come
Radio Australia
GARRETT: I think it's always important to remember that this is not a fiscal crisis that looks like Europe. You know, Greece's public debt is about 120 percent of GDP at the moment, in the US it's 70 percent. Greece finds it very hard to borrow money ...

Cash-strapped RI city files for bankruptcy
The Associated Press
CENTRAL FALLS, RI (AP) — The state-appointed receiver overseeing Rhode Island's cash-strapped Central Falls on Monday filed for bankruptcy on the city's behalf in an effort to solve its fiscal crisis. Receiver Robert G. Flanders described the step as ...

Azeem Ibrahim: Why Christine Lagarde Is the Wrong Choice for IMF...
By Azeem Ibrahim
So what is the future of the European Monetary Union now the IMF has been called in to help? When the Euro was founded in 1999 with the Lisbon Treaty, the European Central Bank was established to provide stability for member nations, ...
FierceReason.com

Solutions to Financial Crisis | Economics Blog
By tejvan
Readers Question: I have recently read an article stating that “a country has only four options for getting out of a financial crisis: devalue, inflate, default, or deflate”… Would you be so kind to explain what this options comprehend? ...
Economics Blog

Romania: Economic recovery but caution is | Economics Newspaper
By B.B
The Romanian economy has resumed growth, but the authorities should maintain fiscal discipline and continue reforming the public sector, said Monday the head of the mission of the International Monetary Fund (IMF) in Bucharest, Jeffrey Franks. ... rorymccafferty on Cancellation Speculation: U.S. Treasury Secretary Geithner remained in office. i really beleive they are trying to default on the debt. so as, we could have one economic currency thruout...4 ...
Economics Newspaper